How does a medical credit card work?

Medical credit cards may be offered by dentists, eye doctors, audiologists, cosmetic surgeons, and veterinarians. They differ from traditional bank credit cards because they can only be used to pay for health care, and only within the network of healthcare providers that accept the card. However, when you use a medical credit card, you are borrowing money to pay your doctor, dentist, or other medical provider. As with any other loan, look at the fees and interest rate and compare the medical credit card with other options (like an existing credit card).

How it works

When you use a medical credit card, you are putting your doctor, dentist or other medical bill on a credit card just like if you bought something else with a credit card. The doctor, or a member of the doctor’s staff, signs you up for a credit card that is offered by a bank or credit union, and typically the credit card company checks your credit. Once approved, the credit card company pays your doctor. Now you owe the credit card company. You should send payments to the address on your credit card billing statements, not to your doctor’s office.

Deferred interest

The interest charge on medical credit cards is usually deferred for a period of time. This means that generally, if you pay off the balance before the end of the deferred interest period, you can avoid paying interest on the amount charged. However, if your payment is more than 60 days late or you still have an unpaid balance by the time the promotional period ends, then the credit card company might charge you for all of the interest that’s been building up from the date that you made the charges. That means you might end up paying lots of interest rather than the zero-percent rate that you expected. Learn more about the risks of deferred-interest rates on credit cards.

Your credit card agreement

Your healthcare provider should give you the key terms of your credit card account before you apply for the card. It’s important to review the terms and make sure you understand and are comfortable with them. This disclosure should tell you how long your zero-percent interest rate lasts.

TIP:

If you can’t afford your hospital bill, ask the hospital whether it has a “charity care” or similar program. Many hospitals have some obligation to provide free or reduced fee care for those who can’t afford treatment. However, once you put your hospital bill on a regular or medical credit card, you may not be eligible for help under the charity care program.

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